Foreign Investment in Montreal’s property market surged a whopping 183% in 2018 over the previous year—the likely the result of foreign buyer taxes in Toronto and Vancouver.
“It’s not a coincidence that after the foreign investor taxes in Toronto and Vancouver, interest moved to the Montreal market,” said Altus Group’s Senior Director of Innovation and Growth Strategies Vincent Shirley. “Foreign investors originally looked at the Vancouver and Toronto markets but they also recognized Montreal as a discounted market. There are more factors involved than just that: The fundamentals in Montreal are really strong right now and the job market is very good too.”
According to Altus Group’s Montreal Flash Report 2019, year-over-year investment property sales volume in the city increased 18% last year, hitting $6.5 billion, thanks in large part to renewed interest in Montreal Island properties located downtown and on either side of Mount Royal. Sales volume on the Island of Montreal reached $785 million.
The report also noted that almost half of total new condominium sales last year were concentrated in downtown Montreal, while the rest of Montreal Island received about one-third.
“There is a lot of job creation on Montreal Island and demographics are very strong,” said Shirley. “We had a lot of structural issues for about 40 years with a very high unemployment rate, but we’ve seen it go down the last two or three years. There’s a lot of compression with the unemployment rate and now we’re at 6% or so, but it’s forecasted to go down to 5.5% next year because job creation is very strong, as are prospects for future employment.”
In fact, Montreal is becoming a leading hub for artificial intelligence and its pharmaceutical sector is also robust. Shirley noted that Montreal’s universities serve as pipelines for those industries in particular.
Even more prominent is Montreal’s port, which is, bar none, Canada’s busiest.
“Montreal’s port accepts over 75% of commodities that come through all Canadian ports,” said Shirley. “A lot of venture capital is invested in Montreal’s technology and AI industries and our pharmaceutical sector is very strong.”
Despite Montreal’s good fortunes after decades of political upheaval surrounding language and Quebec’s place within Canada, there is reason for slight consternation. The Montreal municipal government intends to implement the so-called “20-20-20 rule,” says Shirley.
“It’s going to be 20% social housing, 20% affordable housing, and 20% family housing,” he said. “The real estate industry understands affordability and inclusionary zoning is important, but we just want to make sure the push for it doesn’t disturb the economics of Montreal and development doesn’t go into the suburbs.”